iPhone 3G does not capture 17 percent of the US market for cell phones

It’s interesting to me how people contort Apple market share figures to make them look better than they really are. If Apple’s market share of, say, the PC industry isn’t high enough, we’ll just use the US figures without mentioning that’s what happening. Still not high enough? We’ll use a nebulous and pretty-much-made-up figure about, say, notebook sales. Still not good enough: OK, US notebook sales to consumers, only in retail stores. Eventually, Apple will appear to dominate the PC industry. It’s fun.

The iPhone outsold the BlackBerry Curve, BlackBerry Pearl and Palm Centro in the June through August window and used the spike generated by the launch to give all iPhones about 17 percent of the US smart phone business from January through August, or more than one in six smart phones sold in the country.

The figures are targeted at typical sales, however, and don't include corporate sales that often favor BlackBerries and Windows Mobile devices in the US

So this is just like Mac market share, in other words. It’s a subset of a subset of a market, picked to make the picture look even rosier than it really is. It’s US sales of smart phones to consumers over the counter at retail locations only, not “US sales of smart phones.” Most smart phones are sold to business users, not consumers, incidentally. And that means that “typical” smart phone sales are corporate sales, not consumer sales. This whole thing is a crock.

Now before any of you Apple boys get your panties all twisted up in a bunch, let me remind you that I use, enjoy, and recommend the iPhone. It’s a great device, and arguably the nicest smart phone available for consumers today. No doubt about it. But this isn’t about my personal preferences, or some bizarre need by the press to continually inflate Apple’s very real successes. The iPhone’s doing great. And it’s opening up a consumer market for smart phones. That’s the real story here.

But this story has now been misreported and will be widely broadcast as truth. That 17 percent figure is representative of only a very small portion of the overall smart phone market. It’s just not true.

Discuss this Article 73

Don't forget that Apple's Mac sales are higher than PC's in some cases... like...
in the U.S.
...In Consumer markets...
...when laptops are purchased...
...and it costs over $1,000....
... and sold to college students between the ages of 18 and 25....
...at major universities...
...to cinematography majors....
In that market... Apple just KILLS PC's and Windows! ;)
It should also be noted that over-the-counter sales are the only way to get a "corporate" iPhone anyway. Most businesses, if given the opportunity like BB and WM, would not choose a retail store to purchase them. However that's the only way to get an iPhone so there's really no way to know how many iPhones were sold to business users (I know there's a business plan for the iPhone but I don't know anyone who has used it, yet I do know some business users who use the regular plan).

While you've mentioned notebook sales, I gotta add that the ACER $400 notebook at BestBuy has a 15.6 in WS beautiful LCD, and plays DIVX movie while playing an online Webkinz game without a hiccup. MS Works is included with Vista Home Premium. It starts apps fast and display web pages very fast too. I can read 30 lines on a Word page at 10 size font and 26 at 12 size. It seems light to me, but you all know I'm a weightlifter. You can get an additional BB 1 yr warranty for $79 or two more from ACER for $99, for a total of 3 yrs. My wife asked if she can have it [I just bought it for web use while I travel. Obviously it won't game well, but how can Apple compete with this price? If this is just for the traveler niche [those that have more robust desktops at home], the price is kinda unbeatable. The screen looks gorgeous for darn sake. A sub $500 laptop that's warranteed for 3 yrs? Well we like it and it suits are needs. I could buy one for all 3 kids for under $1500, or $1200 if I risk the 1 yr warranty. It's going took get harder for Apple to keep market share growth without a much less expensive line. Remember, 3 yrs of factory warranty for a total of $498 adding the cost of the laptop.
Wae, I won't tweak as you suggested BTW. Thanks.
One other thing, ACER laptops are purcased in abundance by my hospital system, which has over 1,000 bed between 3 hospitals. Everyone seems to like them, but I don't really know much about the models, but IT never buys top of the line!

DRWAM,
"Obviously it won't game well, but how can Apple compete with this price? "
Apple's laptops use the same components as other PC vendors, they're manufactured at the same factories in China, and Apple doesn't have to pay layers of distributor's profits since they control their channel from design to retail.
So, Apple could compete with this price by deciding they want to, accepting lower profit margins and just lowering their prices.

@DRWAM:
I wish the $650 Acer laptop (15" screen, AMD 2.2ghz, 1gb RAM, nvidia gfx) I bought in October last year running Vista Home Basic would run as well as yours seems to. First thing I did when I got it was to put a movie DVD in. Windows Media Player opened and told me it couldn't play it and to download from the web, which it tried to no avail. Then the Acer software popped up and tried to play it, but it was as jerky as anything.
So I downloaded VLC and that worked, if by worked I was willing to accept jerky playback in action scenes. How would anybody who didn't know about VLC accept that a brand new machine can't even play a DVD out of the box?
The machine has never worked right, even after the update to SP1. It takes 20-30 seconds to wake from 'sleep' etc, and sometimes wakes in the middle of the night and spins the DVD in the drive up for no apparent reason - we soon learnt to take any DVD out before going to sleep!
Needless to say I won't be buying another Acer machine. Glad yours is going well.

Yes to be more precise, the line should have been: Apple captures 17% of the consumer smartphone market. Which is really what is interesting anyway as it is what people choose to buy for their use when they have the choice and not what a company imposes on their workers. Same thing for PCs.

I just used vlc, I immediately uninstalled the Google tool bar, but otherwise never got rid of the trialware, including McAfee which is running and freebie software. It's running Vista Home premium SP1 on only 2GB of RAM. It wakes quickly and is very responsive. I have to compliment it, although I have a Win Tower and Mac Pro Tower which are very robust. This laptop even burned a 2 DVD restore disc fast. It's not a Core 2 Duo, but I think it's a 45nm Penryn.
Would turning off Aero e improve performance? Is it advisable/needed?

So, I agree with Paul on this one. Why inflate the numbers with BS like this? The iPhone is great, doing well and likely to do better over time.
In a true miracle, my work bought me an iPhone, something I would never have paid for myself because of the monthly charges, and I've had a few days to use the thing.
Aside from media hype: This is a breakthrough device. A platform. With the app store, this is just so versatile. In truth, the fact that this things is a "phone" is the least important part.

@daveinla - I don't know that I would say that companies impose phones or PC's on the workers. They use what works to get the job done. In some cases, like at the company that I work for, you even get to chose between multiple vendors. So, don't blame Apples low market share on the customers...that is a bad idea. Apple should go out and do what they can to get enterprise level applications to operate on OS X at least as well as they do on competitor OSs, such as Windows, HP-UX, Linux, etc. If you are talking about the desktop, they should work to make deployment as simple and cost effective as MS has.
If they would lower the cost at the consumer level, I really do believe that their market share would increase. But, as market share increases, so does the inherent risk of using it. I suggest Macs to many people that seem to have troubles with Windows PCs getting loaded with malware because of poor management and unsafe browsing habits. Usually, the answer is something like, "No, I can't afford a Mac."
--tayme

And, of course, they make it even fuzzier by picking branding for the target.
For example, Palm's entries are a mix of their own OS and Windows Mobile. On the other hand, Windows Mobile is split between the brands. I can't even measure by manufacturer because in this market you see things like the same HTC phone sold under the HTC, Verizon and Sprint brands...
The "brand vs technology" item is what you also see in Apple's Mac keynotes and Apple's deceptive TV ads. You get the market definition narrowed down enough so they find a niche where Mac is number 1 (Say CFisher83's retail laptop sales to college film majors). What they don't mention is that numbers 2-10 are all Windows machines and that combined they outsell Macs by 5 to 1. The impression isn't "we've got a plurality of a niche in a fragmented market", it's "everybody uses Mac" which is clearly wrong.

@Cfischer83 "It should also be noted that over-the-counter sales are the only way to get a "corporate" iPhone anyway" NOT TRUE. AT&T markets the iPhone to SMB customers through their Premier channel and is also available via the Enterprise Business wireless accounts. Same as RIM, Palm, HTC, etc. all available through direct channels.

As I stated before, if crapware is able to be uninstalled, and decreases the cost of my PC by at least $200, then I'm fine with it. Add more so I spend less, because I will just delete it.
BTW, Win Media 11 on Vista Home Premium with 2GB RAM plays full DVD's fine on the $400 ACER. Mike, Apple could really use you to slap some sense into them.

Paul, or maybe your spokesperson Mike, simply explain to me just what is the problem here?
I just don't get it. There is no "contorting" of figures here. If NPD count sales of Smart phones at retail ..... then that's just what you get.
What is "fuzzy" about showing the sales of these phones by their maker? Just because they don't count sales by platform doesn't mean that the figures are deceptive.
If it's OK for Paul and the rest of the media to discuss Zune's US market share .... or even Zune's market share in the hard-drive market ONLY .... or US ..... or Japanese sales of XBox 360....
..... what is the problem with talking about other companies products in a similar fashion?

"If it's OK for Paul and the rest of the media to discuss Zune's US market share"
OK. Fair enough. While we're at discussing Zune's market share in India, can we also talk about how many people watch CBS and NBC in South Korea.

The comment about the Zune is a fair one. Ballmer quite hilariously claimed that the Zune (the original Zune) had "20% of the high end market", when in fact the Zune is still in a struggle for 3rd place, with about a 2-3% marketshare.
Call BS on all of this stuff. It is reminding me of the lies we're now hearing the presidential campaign. All technically "true" in some sense, all misleading and useless.

MaryW
To use your analogy, how honest would you think a headline was that read:
Microsoft Zune dominates portable media player market.
(and, of course, buried in the article mentioned that I only counted players with FM radios)
What's deceptive here (and I suspect you know this) is that saying:
iPhone 3G now 17% of US smartphone market
when you really mean
iPhone 3G now second most popular smartphone brand sold at retail with sales of 17%
is not honest.

"The comment about the Zune is a fair one. Ballmer quite hilariously claimed that the Zune (the original Zune) had "20% of the high end market", when in fact the Zune is still in a struggle for 3rd place, with about a 2-3% marketshare."
Ballmer claimed Zune would capture 20% of the market. There's a big difference. Moreover, they were right then when they said they had 10% of the hard drive based media player market, because that was the only market in which they competed. You don't see them making such claims now.

Paul,
The reason Apple and their fans boost their numbers to make themselves sound important. They want to boost their numbers and have bold marketing because they feel like they have to feel important. To me, the real and honest statistics always tells the story. Just like in election years where the conservative chimes in with the now getting old charge of being a "Liberal." What the heck does that tell anyone? Does that tell me a damn thing about policy? Heck No. Thats why I take any Apple related statistics with a huge grain of salt.
daveinla - What phone companies have you been using that has "imposed" anything on you. Since I've been with AT&T(formerly Cingular) and Sprint. Nobody "imposed" any phone on me, my brother, or my parents. They walked in saw the multiple phones from the freebies to the ones you pay extra for. Then you select the phone, the contract, and then you sign a contract. You agree to said terms and sign on the dotted line. Thats part of a free market economy. You have a choice.
Also, at the computer jobs I've worked at, nobody imposed a computer on me. We actually got to build our own workstations, choose the operating systems, and had a great deal of flexability with applications. Mainly because they tested a lot and put guidelines for so many apps. (Except for Real Player, that was banned.) Back then we had a choice from Windows 98, 2000, XP, Red Hat Linux, Ubuntu, Fedora, or we could run a Mac. We all chose Windows machines, because Macs only constituted 2 percent of our business. Yet we had running Linux machines both as test machines or workstations for business use.
Nobody disputes that the iPhone is nice piece of technology and a revolutionary platform. However, Apple's constantly deceptive marketing makes you wonder why? If the damn phones and the damn computers are so freaking great, why the hell do you need such shady marketing?
Personally speaking, I"d rather have the Instinct, HTC's phones, or a Blackberry to the iPhone. If there was actually 17 percent of users having iPhone's in that numbers, they must not live here. I would say out of the thousands of customers we get at my job, I can name two people who own an iPhone. Not a single one of them an iPhone 3G. So maybe its 17 percent of 1 percent of all cell phone users that have the iPhone 3G.
As for the previous post about Paul's Server, who the heck pissed in so many people's Cheerios that morning?
Peace.

Sub, the data/article came from NPD group, not Apple nor fanboys. They claim to be a leading 'Market Research For The Wireless Industry'. However, did any of you read this as I can't find the exact reference? What I did find is that the numbers are based on a survey, not an exact count. They could be total BS. Please correct me if I'm wrong.

@Doc:
Get rid of the Acer Empowering Technology.
It's a major resource hog, and doesn't do anything above and beyond what Vista already does (and the extra stuff is stuff you'll never use).
If you go into Control Panel, then to "Uninstall a program", there should be a listing that says "Acer Empowering Technology". It will ask if you want to remove everything. Do so. Also, you may have to exit from one of the Acer controls that runs in your System Tray while uninstalling. I can't remember which program it is but it's likely something like the eNet management or something or other. Just right-click the icon and choose Exit. The uninstall should go without a hitch after that.

@MikeG
"To use your analogy, how honest would you think a headline was that read: Microsoft Zune dominates portable media player market."
It's not an analogy. It's an example of the very same thing.
I cannot find any example of these latest NPD figures (17%) using the term "dominate".
If you and Paul have got a problem with sub editor's (who usually write them) headlines .... then you have a point. But you know what they say about people in glasshouses. Even Paul doesn't know whether his headline is true or not.
My problem with Paul's post is that he is shooting the messenger! These figures have been used by many tech news sites (including Mac ones) yet he just ads the usual "Mac fans lying spin" and you and the usual suspects line up to agree.
Here's one for you all: Microsoft stated they would sell 20 million WinMo powered call phones by the end of their fiscal year. They lied. See how easy it is?

>>But this story has now been misreported and will be widely broadcast as truth. <<
Who cares? More technology please, and less whining.
Oh, and tell Leo it's ok to say 'PODCAST'. It makes him sound like a kook.

>>the ACER $400 notebook at BestBuy has a 15.6 in WS beautiful LCD, and plays DIVX movie while playing an online Webkinz game without a hiccup. MS Works is included with Vista Home Premium.<<
I bought my wife the same one...it works well for the basics...very well.
It does need 1GB more of RAM than it comes with...

Shark,
"Ballmer claimed Zune would capture 20% of the market. There's a big difference. Moreover, they were right then when they said they had 10% of the hard drive based media player market, because that was the only market in which they competed. You don't see them making such claims now."
Respectfully, I disagree. Ballmer was playing semantic games. We should use hard numbers that MEAN SOMETHING, not restrict the area of discussion so as to make the numbers true, but almost useless. Where Microsoft competes with the Zune is up to them, but no one cares if they have 99% of a small (and that's the point: small) fraction of "the market", because "the market" is portable mp3 players, not arbitrary subsets of that.
Apple partisans are routinely ridiculed for trying to puff up OSX numbers by using restrictive terms ("retail sales to college students at Ivy League schools"). And, I agree that's a pretty silly line of reasoning, because the market is computers, not arbitrary subsets of that.
The point is this: What is stupid when Apple does it, is ALSO stupid when Microsoft does it. As consumers, and (obviously if you're here posting) tech geeks, we should call bullshit on this stuff no matter who does it. This may be the difference in our viewpoints.

"Apple should go out and do what they can to get enterprise level applications to operate on OS X at least as well as they do on competitor OSs, such as Windows, HP-UX, Linux, etc"
Why on earth would Apple bother spending money trying to penetrate a segment that doesn't bring any money to sell boxes that are more expensive to manufacture than the competition? (MacPros) ??? They won't develop a cheap tower to enter that business, it's not they motto and business model !! Don't you think Dell would rather be in Apple's shoes right now ?
The reason they built the MacPros and XServes was to serve the film and graphics industry that use them extensively macs and who don't care paying $500 more on a machine as long as they know it's a good investment.

I think that there is a lot of room to decrease prices in order to gain some market share. Market share does have importance respect to sustainability. Perhaps a good example is the price drop in the iPhone. Using my practice as a model, we have high end, high profit margin, low volume products and low end, low profit margin, high volume products. Small decreases in the high end causes a large decrease to the bottom line, but the opposite occurs with the low end stuff, which brings in more revenue to the bottom line. Mac books are getting there, but aren't there yet. The MBP is just outrageously priced when comparing similar configured Windows models. You really need to be a Mac lover to buy one, IMO. The Pro Towers are difficult to compare as the architecture is really only used in high end work stations. I've seen similar prices and even higher Windows cased configurations, but the Market seems very small [yep, I bought one as I need to 'feel' the power. But I don't do the same with cars. GO figure!]

"Why on earth would Apple bother spending money trying to penetrate a segment that doesn't bring any money to sell boxes that are more expensive to manufacture than the competition? (MacPros) ??? They won't develop a cheap tower to enter that business"
Doesn't seem that hard - just remarket the Mac Mini as a business low-power SFF "green" PC....er....maybe Greenpeace should field that one.

@subhero
"The reason Apple and their fans boost their numbers to make themselves sound important."
"If the damn phones and the damn computers are so freaking great, why the hell do you need such shady marketing?"
Here is the web's disinformation echo chamber in all it's glory!
The NPD Group publish their statistics and that gets spun to mean that Apple fans or indeed the Apple marketing department are responsible. What is wrong with you people?
Perhaps they should change their name to the NPD Cabal.

@daveinla - You said "...it is what people choose to buy for their use when they have the choice and not what a company imposes on their workers." and I responded by giving you one example of how this is not true, along with a suggestion for Apple to make some changes to get into the market that you were complaining about. Your product bias jumped out in front of you and blocked rational thought, much like it does in Mike Galos' posts. Sorry, I figured that you maybe had a reason for thinking that companies "impose" a specific brand of PCs on the workforce. I guess that I was wrong. It is more accurate to say that Apple imposes their hardware on OS X users.
Apple makes good products...they are over priced...I know, I have several. Of couse, the imposed use of Mac hardware to run OS X is what causes them to be overpriced...as has been proven by Pystar and others. But, hey...its their choice.
--tayme

Oops, one post got dropped.
Wae, the ACER software will be gone as soon as I can get the kids off it.
Ocean, it's amazing that a $400 laptop beats the pants off my 7 yr old Dell Inspiron that cost around $3,500. Wow how technology has come this far! This dang little cheapo product is pretty fun. And if I get mad, I can smash it with my bare hands and rip it in half...then just go buy another. Disposable technology at it's finest. [HULK SMASH!]

It's amazing to me that we are living through truly history and terrifying financial/economic/political times and Paul can somehow become so appalled by the misuse of phone market share stats by insignificant gadget blogs.
Talk about overreacting to nonsense. I'm not saying Paul's wrong here, because he's not. But for the love of god, man. We're on the verge of true disaster and you're getting all huffy and puffy because "electronista" has a sensational and inaccurate article.
No wonder this site has lost my interest. This conversation is just too ludicrous and petty in the context of the real world.
Sorry. Had to vent. Carry on.

OT:
I just built my first UEFI-compliant system today.
It's not going to be the way it stays though. Something is wrong with either Intel's current UEFI implementation (more than likely, considering it's being adopted at the pace of the BTX form factor), or with Microsoft's support of it. In either case, booting off of a Vista SP1 x64 DVD took FOREVER and a day (literally 3+ hours from "Press a key to boot off DVD" to the language selection screen). For user reinstalls, this kind of wait is just completely uncalled for.
I did go through the motions and install it though. The drive is set up with all of that GPT goodness.
If you're wondering why UEFI is necessary going forward, one of the reasons is this: BIOS's only support up to 2TB of storage on a single disk. Newer, larger hard drives will require it. That's reason enough.
@pappy:
What's the matter? Your summer home now has the value of my northern hunt camp? ;)

tayme's right. If I sold, I would have lost about as much as in the market as many of you would make working the next 25 to 50 years. Richard Fuld needs his butt kicked, the arrogant prick. This site is a distraction to the intolerable chaos.

>>It's amazing to me that we are living through truly history and terrifying financial/economic/political times and Paul can somehow become so appalled by the misuse of phone market share stats by insignificant gadget blogs.
Talk about overreacting to nonsense.
<<
+1

Ahh the market share obsession.
Clear a few things up first. Microsoft does not make PC's or Smart phones, so comparing how smart phones, PC's or Notebook Apple makes to MS is a rather trivial.
Because of the my first point further comparison is even harder to make. When a HP or Acer notebook is sold at Bestbuy HP/Acer gets a cut and MS got a cut when HP/Acer bought Windows. When a Macbook is sold, Apple gets all of the money for the hardware and OS.
So are we talking hardware market share, or OS market share?
As so many people have pointed out, the cheapest Macbook cost more than the cheap Acer. $1099 vs $399. I have some Acer notebook horror stories, so let us know how those $399 notebooks are holding up after a year of daily use. Anyhow Apple clearly makes way more money for basically the same parts, plus a few more features like firewire, webcam, bluetooth, a GIGE ethernet port and probably better overall build quality. The Macbook sales in the US are clearly not hurting for sales, especially at collages and on Amazon its the #1 seller at christmas time.
So my point is Apple gets all of the money for the hardware and OS. It is making a premium on the hardware. That premium is not hurting sales. Which leads to total annual sales.
Apple had something like 24 billion in total sales in 2007 and Microsoft had something like 52 billion (to lazy to look it up). Apple roughly had half the sales yet their MARKET SHARE is considerably less, as Paul loves to point out.
Now imagine is Apple had 30% of the smartphone market and 20% of the PC/Notebook Market, even just in the US. At that point would they have higher sales than MS? Could they buy MS? Would you rather own 10,000 shares of Apple or MS at that point?
Market Share #'s by themselves are worthless.
To Mike's point about cheaper notebooks, the rumors are that Apple is coming out with the a new Macbook, Macbook Pro and possibly new Mini on October 14th. The other rumor is that the new Macbook will have a version that is below $1000 just in time for the holidays. Probably still more expensive than that Acer, but I am sure the sales will be strong.

@Master,
Followed you link. What total meltdown are you talking about? There is almost no text at all in the post. Just a silly headline and a link to the video.
Are you talking about wingnuts in the comments? Who cares about that? there's idiocy in every comment thread on the net.
And I'm not disgusted by Paul's obsession with what happens in irrelevant and tiny mac blogs. I just find it to be overreactions and unworthy emotional energy for a subject of no importance.
Iphone is selling great. Not as great as this stupid website Paul linked to said it does. Who the hell cares what that website says? Nobody.... but Paul.

"It's amazing to me that we are living through truly history and terrifying financial/economic/political times and Paul can somehow become so appalled by the misuse of phone market share stats by insignificant gadget blogs."
"The economy is in shambles and my opponent here, instead of talking about ways to improve it, indulges in nonsensical talk about marketshare. "
Maybe if you put up a 13 minute video showing Thurrott with lobbyists from MS, it'll give you some more credibility.

Oh... and that video is such a hilarious failure. My god. Whoever made that has absolutely no taste or sense of film production whatsoever. It's like a time-machine to video of the 1980s. Utterly unwatchable and embarrassing.

I certainly agree that profitability beats market share at any momonet, but my point was sustainability, especially in view of bad economic times. Can you imagine how much profit and market share could increase if the prices were lower. If Apple doesn't need to split the profit with anyone, why keep the price so high? Because they can? Now if you're saying that equivalent hardware configurations are similar in price [except for the MBP of course], then the market price point has been met and my argument doesn't have much merit. I can't focus on one model line [MBP] to give an honest argument of course. Sorry if I seem a bit Rogerian.